Pro Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represents 75% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 25% of its sales and provides a 60% contribution margin ratio. The Company's fixed costs are RM15,000,000 (that is, RM75,000 per service outlet). The company has a desired net income of RM45,000 per service outlet. What is the RM amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?

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A: Variable Costing :     There are two components of cost, Fixed cost and Variable cost. When we…

Q: Cascade Enterprises enjoys a substantial amount of market power in this market. Cascade has fixed…

A: Profit = Sales revenue  - Variable Cost - Fixed cost

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A: The objective of this question is to calculate the dollar amount of each type of candle that must be…

Q: Stuart Corporation sells hammocks; variable costs are $71 each, and the hammocks are sold for $136…

A: Sales Volume (in units) = (Fixed costs + Desired profit) / Contribution per unitSales volume (in…

Q: Spenser Company sells two products, Delta and Alpha, with a sales mix of 80% and 20%, respectively.…

A: Contribution margin = Selling price per unit - Variable cost per unit. Total contribution margin =…

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A: The break-even point is the point where the company is able to cover all its costs but does not make…

Q: Wells corporation has the following sales mix for its three products: A,20% B,35%,and C,45%.Fixed…

A: Break-even analysis is a technique used widely by the production management. It helps to determine…

Q: Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $18. What amount…

A: Number of units sold means the number of goods sold by the entity during a period. It is determined…

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A: MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is One of the Important Cost…

Q: At a level of 20,420 units sold, Lee Corp. has sales of $653,600, a contribution margin ratio of…

A: Contribution =Sales×Contribution margin ratio=$653,600×58%=$379,088

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A: Contribution Margin is derived by deducting sales revenue and variable cost. This is the profit…

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Q: PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of…

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Q: Coronado Industries has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for…

A: Break even point = Fixed Cost/Weighted average contribution margin ratio

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A: Weighted average contribution margin ratio is the summation of contribution margin ratio multiplied…

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Q: John's Company owns three production lines A, B, and C, and each production line achieves a…

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Q: Sunn Company manufactures a single product that sells for $130 per unit and whose variable costs are…

A: Formula: Contribution margin per unit = Selling price per unit - Variable cost per unit

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A: Margin of safety (in dollars)= Total sales - Break even sales

Q: %. The weighted-average contribution margin ratio is

A: Weighted average contribution margin is sum of Weighted contribution margin of each product in the…

Q: Flounder Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two…

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Q: Berea Company expects to sell 9,000 units. Total fixed costs are $84,000 and the contribution margin…

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Q: Sheffield Corp. has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting…

A: Calculate the weighted average contribution margin.

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Q: Hale & Hearty incorporated currently sells 10,000 treadmills for $520 each. Variable costs…

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Q: Blanchard Company manufactures a single product that sells for $160 per unit and whose total…

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Q: The records of Valium Company show a contribution margin ratio of 45%. The company desires to earn a…

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Q: Idaho Corp. has fixed costs of $20,000 and a contribution margin ratio of 50%. Currently, sales are…

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Q: Wildhorse Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two…

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Q: Ferrante Company sells 24,000 units at $22 per unit. Variable costs are $12.54 per unit, and fixed…

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A: Operating income = ( Sales * Contribution margin ratio ) - Fixed cost

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A: Sales - Variable costs = Contribution margin Contribution margin - Fixed costs = Profit

Q: Sheridan Company has two divisions; Sporting Goods and Sports Gear. The sales mix is 55% for…

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Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.